Export sale exemption cannot be denied merely for lack of proof of foreign exchange realisation where goods moved abroad.

Export sales under the Central Sales Tax regime could not be denied exemption merely because the dealer did not produce proof that export proceeds were realised in India in foreign exchange. No provision in the Act or Rules made such proof a condition for exemption; the controlling test remained whether the transaction occasioned movement of goods from India to a place outside India. As the records showed the goods had crossed the customs frontiers for a foreign destination, non-receipt of sale consideration did not convert the export into a local sale for CST purposes. The assessments were therefore unsustainable.

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Issues: Whether export sales under the Central Sales Tax regime could be denied exemption on the ground that the dealer did not produce documents showing realisation of export proceeds in foreign exchange in India.

Analysis: The assessment orders proceeded only on the premise that proof of receipt of export proceeds in foreign currency in India had not been produced. The Court held that no provision under the Act or Rules required production of such a document as a condition for claiming exemption on a sale in the course of export. The relevant test was whether the transaction occasioned movement of goods from within India to a place outside India, and the documents on record showed that the goods had crossed the customs frontiers for a foreign destination. The Court further held that non-receipt of sale consideration could not convert an export transaction into a local sale for levy of CST.

Conclusion: The exemption could not be denied merely for want of proof of realisation of export proceeds, and the impugned assessments were unsustainable.

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